Demonstrators tore them down as soon as they were put up, saying they would stay where they were and fight what may become a lengthy legal battle.

It is the latest development in a month-long saga that has pitted the protest movement Occupy London against the corporation, the local authority for the Square Mile, and St Paul's. Both institutions own the land around the church but only the corporation is pressing ahead with court proceedings.

The corporation, the local authority which runs the Square Mile, has expressed concern over "worrying trends" at the camp, including late-night drinking, and said companies near the cathedral had complained about losing business.

The corporation decided to resume legal action after two weeks of talks with protesters.Stuart Fraser, policy chairman of the corporation, said previously:

We paused legal action for two weeks for talks with those in the camp on how to shrink the extent of the tents and to set a departure date - but got nowhere. So, sadly, now they've rejected a reasonable offer to let them stay until the new year, it's got to be the courts. We'd still like to sort this without court action but from now on we will have to have any talks in parallel with court action, not instead.

Naomi Colvin, an Occupy London spokeswoman, said:

It is not something we need to be remotely worried about - we've been prepared for it for months. If they want to get an order in the High Court, it could take months. We will contest it. We will be speaking to our legal team and we will be fighting it.

The protesters are part of a global movement demonstrating against the banking system, financial inequality, and governments' response to the economic crisis.

We will be covering the dispute live here throughout the day – as the protesters decide whether to pack up their tents or face being taken to court.

9.57am: The Press Association news agency was speaking to some of the protesters yesterday. Naomi Colvin, one of Occupy London's spokespeople, questioned why exactly the corporation wanted the protesters to leave:

The area by the side of St Paul's churchyard is not obviously in anyone's way - people move freely up and down it every day. They say it is a highway but there haven't been horses and carts here for hundreds of years. People are so serious about this crisis that they are willing to leave their homes and camp out during the English winter.

Tammy Lawrence, 33, said:

I get freezing cold at night but I believe in what we're doing and I'm happy to sacrifice something for it. If you're so angry we're blocking a public highway can you tell us why you've allowed us to be here for a month? They offered to let us stay for two months so they're happy for us to break highway laws for two months but not for longer. All we're going to do if the police come in is sit down.

A spokeswoman for St Paul's, which is not taking legal action, said:

We are committed to maintaining St Paul's as a sacred space in the heart of London and we are enormously grateful to all cathedral staff for meeting the challenges of recent weeks. We recognise the local authority's statutory right to proceed with the action it has today. We have always desired a peaceful resolution and the canons will continue to hold regular meetings with representatives of the protesters. We remain committed to continuing and developing the agenda on some of the important issues raised by the protest.

The notice is "to each and every person taking part in and/or having erected tents or other structures at St Paul's churchyard".

It orders them to remove "all tents and other structures" from the area shown in red and green on this map. The red area belongs to the Corporation of London, the green area to St Paul's. As you can see, the green area is a lot smaller.

public domain

It adds that any attempt to create a new protest camp elsewhere in the Corporation of London's jurisdiction "will be likely to be the subject of immediate further proceedings without further notice".

The notice says the protest camp is "a trespass", an "unreasonable obstruction of the highway", does not have planning permission and causes "significant harm" to the area.

It gives the protesters until 6pm today to remove their tents, although elsewhere in the notice it gives them until 9am tomorrow.

This is what the Corporation would seek from the high court of justice:

• A possession order over the Red Land which, if granted, will mean that you have to give possession of that area back to the City of London Corporation.

• An injunction requiring you to remove the tents and other structures from the Red and Green Land. If granted this would mean that you would be ordered by the high court to remove the tents and other structures and any failure to do so could be a contempt of court.

• Declarations and injunctions from the court which will enable the City of London Corporation to move onto the protest camp and clear it.

It cites the Highways Act, the Town and Country Planning Act 1990 and the Local Government Acts 1972 and 2000.

A court date is likely to be set for next week, the notice says. If protesters want to ask to become a "named defendant" and take part in court proceedings, they can.

The notice adds that the court order, if granted, "will not prevent lawful and peaceful protest" in the area around St Paul's "and is directed at the tents and other structures".

Adam Chapman, head of public law at law firm Kingsley Napley, responded to the eviction notice in an interview with the Press Association:

For the city to get an injunction to evict them, they're going to have to show that is a proportionate step, taking into account on the one hand other people's right to free movement and on the other hand the right to freedom of expression and assembly. The court will have to weigh up the degree of interference as against the importance of the right to demonstrate. I assume the corporation won't try to remove protest altogether but simply sleeping out overnight, and the court will consider how integral that is to freedom of expression.

He said that when a court moved to ban protesters camping outside parliament earlier this year, it took into account that they could remain during the day. The proceedings at Parliament Square took a year and Chapman said he expected any eviction action at St Paul's will also take several months.

I'd say the corporation will succeed in the end but it will take some time. We're talking months - possibly six months but certainly beyond Christmas and into the new year.

The offence is not "restricting" the highway, or even "obstructing" it, but doing so wilfully and without lawful authority and excuse. As Westminster council found in 2002, when trying to get an injunction to stop the late Brian Haw from having his placards and bed on the pavement in Parliament Square, it isn't necessarily enough that there is an obstruction or that it is deliberate. As set out by the judge in that hearing, the case law means that there is a public right of peaceful assembly on the highway, so long as it does not unreasonably impede people passing. The obstruction must be wilful, without lawful excuse and unreasonable.

Whether the obstruction is reasonable also means the court must consider the right to free expression under article 10 and to freedom of assembly under article 11 of the European convention on human rights. Freedom of expression should only be interfered with where there is a pressing social need to protect the rights of others. Westminster council lost its case against Brian Haw on that ground, even though he was wilfully obstructing the highway.

While the position of the OccupyLSX camp is not entirely the same, "restricting the highway" is only the start.

Even if an injunction is given, it would only apply to the physical obstructions, the tents and other objects, not the people. Then, not all of the land occupied by the camp appears to be a highway. If it isn't a highway, the injunction has no effect. For that, the landowner, the cathedral, would have to bring its own proceedings and for the moment, it has suspended all legal action.

As my colleague Riazat Butt wrote yesterday, Stuart Fraser, policy chairman for the corporation, told Channel 4 News on Monday he was prepared to use "all legal measures" including riot police to remove the protesters.

Not in a sense of going in there and causing a riot. Some may resist, some may lay on the ground and have to be carried. If they start hurling bricks, that's their decision to take violence against us. We're not going to send people in and suddenly start being violent.

Fraser, in the same interview, acknowledged that any violence between police and protesters would place the cathedral under great strain.

10.39am: Paul Ridge of Bindmans is no longer representing the Occupy London protesters. Alleged computer hacker Gary McKinnon's solicitor Karen Todner is the latest addition to the demonstrators' legal team, which also includes John Cooper QC, from 25 Bedford Row. We'll have more on this shortly.

They asked the Corporation to open itself to freedom of information requests, publish its accounts retrospectively to 2008, and reveal its financial involvements. They also proposed a commission, including representatives of the main Westminster parties, to look at reforming the Corporation, with the Archbishop of Canterbury suggested to chair it.

They called for:

• An end to business and corporate votes in Corporation elections, which can outvote residents.

• Removal of "secrecy practices", and transparent reform of institutions.

• Decommissioning of the City of London police, with officers put under the Met.

• Abolition of the offices of lord mayor, sheriffs and aldermen.

• A truth and reconciliation commission to examine allegations of corruption.

We asked the Corporation to do three things that every other local authority in the United Kingdom does as a matter of course. We asked the Corporation to make itself accountable to the public under the Freedom of Information Act. We asked the Corporation to publish details of the City Cash account. Finally, we asked the Corporation to be more open about the lobbying activities it has undertaken since the financial crisis of 2008.

For any other local authority in the country, these would be legal requirements. There is a troubling anomaly in the heart of our capital city, a place where normal rules do not apply.

This anomaly is not just a picturesque anachronism that parades past St Paul's in gilded carriages once a year. It is a concentration of power and influence that not only stops our economy working properly, it even warps the policies we follow at a national level. It brings us into disrepute with our neighbours.

The lord mayor of London, David Wotton, waves from his ceremonial coach as part of the lord mayor's show at the weekend. Photograph: John Stillwell/PA

My colleague Ben Quinn has been examining the Corporation in detail.

Today he reports on fresh conflict of interest questions over links between senior elected representatives and property developers involved in major projects in and around the City. He writes:

Sarah Lee/Guardian

Campaigners for reform claim that the City of London's voting arrangements, in which political parties are absent, is key to ensuring that the corporation continues to act not just as a normal local authority, but as a lobbyist for the financial services sector, spending millions every year pushing at home and abroad for light-touch deregulation and free market doctrine.

Based on the size of their workforce, businesses such as banks, insurance companies and stockbrokers can appoint a certain number of voters to participate in the elections, for which candidates have traditionally almost always stood as independents.

Photograph: Riazat Butt for the Guardian Riazat Butt/Guardian

11.39am: My colleague Riazat Butt is down at St Paul's. She has been speaking to Steve Rushton (left), 30, who is manning the first aid tent at the Occupy camp. He said activists have no intention of leaving by the deadline.

The Corporation has been flip-flopping over what to do. The legal process will take months. There are lots of reasons why people are going to stay. They want to be part of a dialogue to create a coherent alternative to a system that is unsustainable, unjust and undemocratic.

11.47am: The Press Association is reporting that Occupy London's QC is to make a statement at the camp at 5pm. More on that shortly.

11.50am: On the Occupy London website, the protesters claim that when the eviction notices were being attached to tents "a representative from the local authority – the City of London Corporation – is alleged to have assaulted two members of the public, one of whom is now receiving hospital treatment". They say they will release video footage of the incident soon.

I have put a call in to the Corporation for their response to this allegation and will post it as soon as I get it.

11.52am: Occupy protesters in the US are planning a day of action with events taking place across the country from Wall Street and Washington to Texas and Seattle. There's a full guide to what's happening and when here. If you are attending any of these "n17" events and want to share images from them, you can add to our Flickr group. If you tag your images from the day of action with occupyn17 we are hoping to build up a picture of the day across the US which we can feature on the site.

Stuart Fraser of the Corporation of London discussed the Corporation's controversial "City cash fund", whose assets remain closed to public scrutiny because the Corporation describes it as a commercially sensitive "private fund". Asked if the total assets for all of the City's funds were worth £3bn, he said: "I think it's probably near the mark but I can't verify its accuracy". He also said of the fund:

Well, quite frankly there are some people who would like to have it for themselves – if you know what I mean – we didn't really want to attract the attention. But now, under transparency we've got to think about this seriously. I think only for the point of view – let me put it like this, it is under discussion.

On opening the fund up to freedom of investigation requests, he told The Report:

I think it's fair to say we've got to look at this. The City's cash is certainly not part of the local authority's fund. It doesn't come from government so why should we, in a sense, because it is not public money, it's not been given to us by the government. This is private money.

Jackie Doyle Price, the Tory MP for Thurrock and former private secretary to the lord mayor of London, told the programme: "My message to them [the Corporation] would be – there is nothing to be lost by being transparent about these things … The corporation, perhaps by considering being more open, would help to dispel what is now a lot of antagonism towards the City as a financial centre."

Father William Taylor, the vicar of Hackney, said:

I was completely gobsmacked by the the City Corporation and how it worked and how it concealed from the public those that weren't elected to the council, the resources that it had at its disposal. They would say things like: "We don't want Ken to know how much we've got, because he'd want it."

"Ken" is presumably a reference to Ken Livingstone, Boris Johnson's predecessor as elected mayor of London.

12.31pm: Riazat Butt reports that Occupy London will be organising an event at St Paul's at 5pm, with speakers including John Cooper QC, who will be talking about the significance of the eviction notice and the legal process. He will also be outlining Occupy's response to the Corporation. The event will be livestreamed.

12.36pm: Riazat Butt reports from St Paul's that there is no sign of anyone packing up their tents at Occupy London.

The Standard reported that the protest had £7,300 of donations in the bank, and was receiving £750 in donations a day. Other interesting figures in the piece were that Paul, the bakery chain that has a branch right beside the camp, donates two bin liners of French bread to the demonstrators a day, and that there are eight hours of lectures a day at the camp's Tent City University. The article also reports that Pret a Manger in Paternoster Square, which remains closed to all but those who work there, although there is restricted access to shops, bars and restaurants from other thoroughfares, has been losing £20,000 a week.

When the 6pm deadline ticks past, the City of London will have to consider what to do next. Either they can enter another round of talks with the protesters or they can take my client to court … Due to timetabling we would expect a court date next Wednesday.

Cooper was scathing about the Corporation's switch from focusing on health and safety law to trespass and obstruction of the highway, calling it a "completely different issue".

He said the demonstrators had a strong case.

What is not clear is actually who owns the land. There are three owners in the camp area: the City of London, St Paul's and common land. Historically people were allowed to graze their sheep on common land. We need to have a look at 400-year-old laws. I do hope, however, there will be further negotiations even after the 6pm deadline has passed.

2.07pm:Riazat Butt, the Guardian's religious affairs correspondent, was down at St Paul's this morning. She said that, despite impending legal proceedings, it is very much business as usual at the Occupy London camp and there is no indication of people getting ready to leave.

Guardian

The atmosphere is calm - apart from the lady sat outside a tent telling a tourist to shove off and a shouting match between two protesters. Tea is being made and drunk, dishes are being washed, and rubbish is being recycled. While I was there I spoke to a few people - Karen Todner (by phone), who is the new lawyer for Occupy, the Rev Adrian Benjamin, who is a prebendary at St Paul's Cathedral, and Tanya Paton, from the protesters' church liaison group.

Todner, who was instructed yesterday, said she would be looking at the way the eviction notice was served on the camp. It should have been read out and there should have been an opportunity for questions, she said. It is not clear whether this procedure was followed. The notices appear to have been affixed to tents. "There is concern about the way notices were served. They [the camp] are not in a position to finance legal representation so I am acting pro bono. The case could go on for months." She takes over from Paul Ridge of Bindmans.

Todner, who has previously represented alleged hacker Gary McKinnon, says high court proceedings will probably be issued on Friday morning and that there's likely to be a case management conference next Wednesday to discuss a timetable.

On to Adrian Benjamin. He said the Corporation of London's decision to press ahead with eviction has "wrongfooted" St Paul's Cathedral. "The Bishop of London told the Corporation to back off, which they did, but there are all sorts of people leaning on it - the government, Boris Johnson and so on. He [the bishop] can't do it again. We're not involved so we shall we have to see what happens. But it would be very sad if the situation became violent. Of course some people will say the Corporation is doing the cathedral's dirty work."

Tanya Paton, from the church liaison group, was angry at the deathly silence from the Bishop of London's office. She says there has been no further dialogue between Richard Chartres and Occupy since 30 October, when he and Graeme Knowles, the former dean, appeared on the cathedral steps. She says: "He talked about an initiative with Ken Costa but we've heard nothing about it. Why aren't we involved in it? The bishop involved himself in this situation so he has to take responsibility."

She revealed that the Oasis Centre in Lambeth has offered its premises free of charge. It has conference facilities that seat up to 400 people and Occupy is proposing this as a venue, a neutral space, for any debate between business leaders and activists.

4.03pm: The Rev Adrian Benjamin has been arranging for a pastoral team to be available to protesters, Riazat Butt writes.

Guardian

There is one inside the cathedral - for staff, visitors and so on - but he also wants there to be a more permanent presence on the steps. "We have people with genuine concerns; you also have volatility and the danger of threats. There is also a soup kitchen scenario."

Tanya Paton, from the church liaison group, gives an insight into why Occupy rejected the Corporation's offer. "Telling us we must leave by a certain date is not dialogue, it's a demand, and we will not negotiate."

4.30pm: My colleague Peter Walker has just got down to St Paul's for the protesters' lawyer's statement, due at 5pm.

He says that if the protesters are planning to pack up by 6pm they'dbetter get a move on.

Guardian

Unsurprisingly, there's pretty much no sign of the looming Corporation of London deadline, just a few more TV crews and photographers than usual. I can't even see a single notice remaining on a tent.

Overall, it's business as usual in what increasingly feels like an established - almost cosy - corner of the City, albeit one that still partly resembles a medieval fair. I just passed a protester dressed in a giant, furry, pink bear outfit, for reasons that weren't immediately clear.

Otherwise, office workers stride past with barely a look and a few tourists are having a gawp. Every time I return here it strikes me how human, how intimate the camp feels in one of London's more soulless districts, which apart from St Paul's is mainly made up of large but grim 1990s office developments and shops.

5.53pm: A brief note on what happens when 6pm passes at the camp, Peter Walker writes:

In short - not much. We won't suddenly see a fleet of riot police round the corner, sirens blaring. The Corporation of London will most likely goto the High Court tomorrow, with a case management meeting pencilled infor Wednesday next week. Then.. well, it will take a long time, mostlikely months.

5.59pm: Ahead of the 6pm deadline, the campers heard speeches from, variously, their pro bono QC, John Cooper, a supportive vicar and a man who led a multi-faith prayer taking in everyone from the Lord Mayor of London to the world's poor and hungry.

Cooper was limited in what he could say, but seemed quietly confident in the camp's legal case. Asked from the crowd if there was a means by which police could forcibly evict the camp before the case was over, he replied not, excluding serious public order, which doesn't seem likely.

6.18pm: Six o'clock just struck at St Paul's, Peter Walker writes, and the camp remains exactly as it is. The gathering of perhaps 300 activists - watched by lots of media - broke off from speeches to mark the passing of the Corporation of London's legal deadline with a 'silent scream' a masswaving of hands for about a minute. Afterwards he spoke to one camper. Mark Weaver, who has been here from day one. "We're still here," he said. "Still the same old occupation."